Recent events in Europe have illustrated how government defaults can jeopardise domestic bank stability. Growing concerns of public insolvency since 2010 caused great stress in the European banking sector, which was loaded with Euro-area debt (Andritzky 2012).
Banks, government bonds, and default: What do the data say?
Nicola Gennaioli, Alberto Martin, Stefano Rossi, 19 July 2014
Fiscal discipline in the monetary union
Charles Wyplosz, 26 November 2012
Three years into the Eurozone crisis and public debts are still rising, including in the three countries currently subject to rescue programmes. More countries – Spain and Italy for sure, France quite possibly – are inching towards rescues. These nations have three things in common:
Learning from past crises: Into the safety zone
Caroline Van Rijckeghem, Beatrice Weder di Mauro, 25 September 2012
Since the lost decade of the 1980s a rich literature on financial crises has evolved, including a theoretical literature which emphasised the potential for self-fulfilling expectations within a zone of vulnerability (e.g. Krugman 1996).
Contagion during the Greek sovereign debt crisis
Jakob de Haan, Mark Mink, 23 February 2012
In the course of 2010, the financial problems of Greece became so severe that the Eurozone countries together with the IMF agreed to provide emergency loans for a total amount of €110 billion, to be disbursed over the period May 2010 through June 2013.
They still don’t get it
Charles Wyplosz, 25 October 2011
Editor's note: This column updates the column originally posted on 8 August 2011.
Greece and the fiscal crisis in the Eurozone
Willem Buiter, Ebrahim Rahbari, 12 October 2010
CEPR Policy Insight No.51 can be downloaded free of charge from the CEPR website here.
Greece and the fiscal crisis in the Eurozone
The Editors, 12 October 2010
The saga of the Greek public finances continues. But this time, Greece is not the only country that suffers from doubts about the sustainability of its fiscal position. Quite the contrary. The public finances of most countries in the Eurozone are in a worse state today than at any time since the industrial revolution, except for wartime episodes and their immediate aftermaths.
It takes less than a sovereign default to cause instability
Fabio Panetta, Giuseppe Grande, 7 August 2010
According to many commentators a sovereign default could be the next stage of the crisis (Reinhart 2010, Rogoff 2010 and Reinhart and Rogoff 2010).
The costs of sovereign default: Theory and reality
Ugo Panizza, Eduardo Borensztein, 6 May 2010
Sovereign debt is different. Private debt contracts can be enforced in court and court rulings enforced by asset seizures. By contrast, public-debt creditors:
How to deal with sovereign default in Europe: Towards a Euro(pean) Monetary Fund
Daniel Gros, Thomas Mayer, 15 March 2010
Big financial crises are usually followed by pressure on public debt and often by sovereign default (Rogoff and Reinhart 2009). Europe, or rather the Eurozone, was caught totally unprepared for this second phase of the crisis.
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